What changed in this filing

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Item 1. Financial Statements

2021-08-13 compared with 2021-05-13 · 201 added, 140 removed, 280 unchanged (55% of the section changed)

4 unchanged sentences

Cash and cash equivalents

Subscription receivable

Other receivable - related party

15 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized and 0 shares issued and outstanding

Common stock, $0.001 par value, 75,000,000 shares authorized and 25,352,809 and

23,856,151 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 75,000,000 shares authorized and 27,379,485 and 23,856,151 shares issued and outstanding, respectively

Additional paid-in capital

7 unchanged sentences

Statements of Operations

Three Months Ended March 31, 2021

Three Months Ended March 31, 2020

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Operating expenses:

3 unchanged sentences

Loss from operations

( 3,811,320 )

( 2,473,771 )

( 7,420,977 )

( 4,441,902 )

Other expenses:

3 unchanged sentences

$ ( 2,473,771 )

$ ( 7,427,077 )

$ ( 4,441,902 )

Loss per share - basic and diluted

4 unchanged sentences

Stockholders' Equity

For the three months ended March 31, 2021 and 2020

Stockholders'

For the three and six months ended June 30, 2021 and 2020

Total Stockholders'

Balance December 31, 2020

3 unchanged sentences

Stock-based compensation

( 3,613,404 )

Balance March 31, 2021

( 24,559,747 )

Common stock issued for cash and subscription receivable, net

Stock-based compensation

( 3,813,673 )

Balance June 30, 2021

$ ( 28,373,420 )

Balance December 31, 2019

1 unchanged sentence

Stock-based compensation

( 1,968,131 )

Balance March 31, 2020

( 13,456,603 )

See accompanying notes to the unaudited

financial statements.

Stock-based compensation

( 2,473,771 )

Balance June 30, 2020

$ ( 15,930,374 )

See accompanying notes to the unaudited financial statements.

CNS Pharmaceuticals, Inc.

Statements of Cash Flows

Three Months Ended March 31, 2021

Three Months Ended March 31, 2020

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Cash Flows from Operating Activities:

6 unchanged sentences

Prepaid expenses

( 1,839,800 )

Accounts payable

2 unchanged sentences

Net cash used in operating activities

( 8,305,992 )

( 4,597,572 )

Cash Flows from Investing Activities:

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Proceeds from exercise of warrants

Proceeds from sale of common stock

Proceeds from sale of common stock, net

Net cash provided by financing activities

Net change in cash and cash equivalents

( 7,153,921 )

( 4,615,517 )

Cash and cash equivalents, at beginning of period

5 unchanged sentences

Cashless exercise of warrants

Common stock issued for subscription receivable

See accompanying notes to the unaudited financial statements.

1 unchanged sentence

Notes to the Financial Statements

Note 1 –

Nature of Business

Note 1 – Nature of Business

CNS Pharmaceuticals, Inc.

(“we”, “our”, the

“Company”) is a clinical pharmaceutical company organized as a Nevada corporation on July 27, 2017 to focus on the development

of anti-cancer drug candidates.

Note 2 –

Summary of Significant Accounting Policies

“our”, the “Company”) is a clinical pharmaceutical company organized as a Nevada corporation on July 27,

2017 to focus on the development of anti-cancer drug candidates.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation - The accompanying unaudited financial

statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America

GAAP”) for interim unaudited financial information.

Accordingly, they do not include all of the information and footnotes

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financial statements not misleading.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of the

final results that may be expected for the year ending December 31, 2021.

Operating results for the six months ended June 30, 2021 are not necessarily indicative of the final

results that may be expected for the year ending December 31, 2021.

For more complete financial information, these unaudited financial

statements should be read in conjunction with the audited financial statements for the period ended December 31, 2020 included in our

Form 10-K filed with the SEC on February 12, 2021 (“Form 10-K”).

Notes to the financial statements which would substantially

1 unchanged sentence

have been omitted.

Liquidity and Going Concern - These

financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge

its liabilities in the normal course of business.

The continuation of the Company as a going concern is dependent upon the ability of

the Company to obtain equity financings to continue operations.

The Company has a history of and expects to continue to report negative

cash flows from operations and a net loss.

Management believes that the cash on hand is sufficient to fund its planned operations into

but not beyond the near term.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification

of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company may seek additional funding

through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and

distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination

Management cannot be certain that such events or a combination thereof can be achieved.

Cash and Cash Equivalents - The

Company considers all highly liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents.

Liquidity and Going Concern - These financial statements have

been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in

the normal course of business.

The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain

equity financings to continue operations.

The Company has a history of and expects to continue to report negative cash flows from operations

and a net loss.

Management believes that the cash on hand is sufficient to fund its planned operations into but not beyond the near term.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

These financial statements

do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that

might be necessary should the Company be unable to continue as a going concern.

The Company may seek additional funding through a combination

of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements,

other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof.

cannot be certain that such events or a combination thereof can be achieved.

Cash and Cash Equivalents - The Company considers all highly

liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents.

Periodically,

1 unchanged sentence

The amount in excess

of the FDIC insurance at March 31, 2021 was $10,825,200.

The Company has not experienced losses on these accounts and management

believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

of the FDIC insurance at June 30, 2021 was $ 6,635,572 .

The Company has not experienced losses on these accounts and management believes,

based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Loss Per Common Share - Basic loss per common share is computed

4 unchanged sentences

excludes common stock equivalents, because their inclusion would be anti-dilutive.

For the three months ended March 31, 2021, the Company’s

For the six months ended June 30, 2021, the Company’s

potentially dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase

5,130,240 common shares, and options for 2,811,736 common shares.

For the three months ended March 31, 2020, the Company’s

potentially dilutive shares and options, which were not included in the calculation of net loss per share warrants to purchase 3,986,630

common shares, and options for 1,939,500 common shares.

Note 3 –

In January 2021, the Company entered into a twelve-month agreement with

an investor relations firm that includes the issuance of 25,000 restricted shares of common stock.

Upon signing the agreement, 6,250 shares

vested immediately, and the remaining 18,750 shares will vest quarterly over the remainder of the agreement.

The Company may terminate

the agreement at any time during the twelve-month period with a fifteen-day notice.

During the three months ended March 31, 2021,

the Company issued 6,250 common shares and recognized $12,625 of stock-based compensation related to the agreement.

In April 2021, the

Company issued 6,250 common shares and will issue the remaining shares over the service period.

On February 12, 2021, the Company entered into a

Capital on Demand™

Sales Agreement (the “Agreement”) with JonesTrading Institutional Services LLC and

Brookline Capital Markets, a division of Arcadia Securities, LLC (collectively, the “Agent”).

Pursuant to the

terms of the Agreement, the Company may sell from time to time, through the Agent, shares of the Company’s common stock with

an aggregate sales price of up to $20.0 million.

During the three months ended March 31, 2021, the Company sold 43,083

shares of common stock to the Agent for net proceeds of $144,843.

For the six months ended June 30, 2020, the Company’s potentially

dilutive shares and options, which were not included in the calculation of net loss per share warrants to purchase 3,986,630 common shares,

and options for 2,250,736 common shares.

Note 3 – Equity

In January 2021, the Company entered into a

twelve-month agreement with an investor relations firm that includes the issuance of 25,000

restricted shares of common stock.

Upon signing the agreement, 6,250

shares vested immediately, and the remaining 18,750

shares will vest quarterly over the remainder of the agreement.

The Company may terminate the agreement at any time during the

twelve-month period with a fifteen-day notice.

During the six months ended June 30, 2021, the Company issued 12,500

common shares and recognized $ 25,250

of stock-based compensation related to the agreement and will issue the remaining shares over the service period.

In July 2021, the

Company issued 6,250

common shares and will issue the remaining shares over the service period.

On February 12, 2021, the Company entered into a Capital on Demand™

Sales Agreement (the “Agreement”) with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of

Arcadia Securities, LLC (collectively, the “Agent”).

Pursuant to the terms of the Agreement, the Company may sell from time

to time, through the Agent, shares of the Company’s common stock with an aggregate sales price of up to $20.0 million.

During the six months ended June 30, 2021, the Company sold 2,063,509

shares of common stock to the Agent for net proceeds of $ 1,084,704 and recorded a subscription receivable of $ 3,569,117 .

The subscription

receivable was collected in full on July 1, 2021.

Stock Options

In 2017, the Board of Directors of the Company approved the CNS Pharmaceuticals,

2017 Stock Plan (the “2017 Plan”).

The 2017 Plan allows for the Board of Directors to grant various forms

of incentive awards for up to 2,000,000 shares of common stock.

No key employee may receive more than 500,000 shares of common stock (or

options to purchase more than 500,000 shares of common stock) in a single year.

2017 Stock Plan (the “2017 Plan”).

The 2017 Plan allows for the Board of Directors to grant various forms of incentive

awards for up to 2,000,000 shares of common stock.

No key employee may receive more than 500,000 shares of common stock (or options to

purchase more than 500,000 shares of common stock) in a single year.

In 2020, the Board of Directors of the Company approved the CNS Pharmaceuticals,

2020 Stock Plan (the “2020 Plan”).

The 2020 Plan allows for the Board of Directors to grant various forms

of incentive awards for up to 3,000,000 shares of common stock.

No key employee may receive more than 750,000 shares of common stock (or

options to purchase more than 750,000 shares of common stock) in a single year.

During the three months ended March 31, 2021, the Board of Directors

approved grants of 536,000 options to officers and employees.

The exercise price of the options was $3.36 and the options expire ten-years

following issuance.

2020 Stock Plan (the “2020 Plan”).

The 2020 Plan allows for the Board of Directors to grant various forms of incentive

awards for up to 3,000,000 shares of common stock.

No key employee may receive more than 750,000 shares of common stock (or options to

purchase more than 750,000 shares of common stock) in a single year.

During the six months ended June 30, 2021,

the Board of Directors approved grants of 611,000

options to officers, employees and a consultant.

The exercise price of the options ranges from $ 2.35

and the options expire ten-years following issuance.

The total fair value of these option grants at issuance was $ 1,769,686 .

The issued options vest in four equal annual

installments beginning on the first anniversary following issuance.

During the three months ended March 31, 2021 and 2020, the Company

recognized $418,053 and $242,209 of stock-based compensation, respectively, related to outstanding stock options.

At March 31, 2021, the

Company had $3,461,948 of unrecognized expenses related to outstanding options.

The following table summarizes the stock option activity for the nine

months ended March 31, 2021:

Of the 611,000 options issued, 75,000

options provided that 25% vested upon issuance, 50% vest upon the Board approving a business development acquisition and 25% vest

over a three-year period in equal installments on each of the succeeding three anniversary dates.

The remaining options issued vest

in four equal annual installments beginning on the first anniversary following issuance.

During the six months ended June 30, 2021

and 2020, the Company recognized $ 875,039

and $ 565,433

of stock-based compensation, respectively, related to outstanding stock options.

As of June 30, 2021, the Company had $ 3,071,647

of unrecognized expenses related to outstanding options.

The following

table summarizes the stock option activity for the six months ended June 30, 2021:

Schedule of Stock Option Activity

Weighted-Average Exercise Price Per Share

Outstanding, December 31, 2020

Outstanding, March 31, 2021

The following table discloses information regarding outstanding and

exercisable options at March 31, 2021:

Outstanding, June 30, 2021

The following table discloses information regarding

outstanding and exercisable options at June 30, 2021:

Schedule of Options by exercise price

Exercise Price

Number of Option/Warrant Shares

Number of Option Shares

Weighted Average Exercise Price

2 unchanged sentences

Weighted Average Exercise Price

As of March 31, 2021, the aggregate intrinsic value of options vested

As of June 30, 2021, the aggregate intrinsic value of options vested

and outstanding were $ 663,219 and $ 710,625 respectively.

As of March 31, 2021, there are no awards remaining to be issued

under the 2017 Plan and 2,263,264 awards remaining to be issued under the 2020 Plan.

As of June 30, 2021, there are no awards remaining to be issued under the 2017

Plan and 2,188,264 awards remaining to be issued under the 2020 Plan.

Stock Warrants

During the three months ended March 31, 2021, the Company received

During the six months ended June 30, 2021, the Company received $ 332,750

in cash proceeds from the exercise of 151,250 warrants previously issued at an exercise price of $ 2.20 .

In addition, the Company

received notices to exercise 1,580,140 warrants on a cashless basis resulting in issuance of 1,296,075 shares of common stock.

The following table summarizes the stock warrant activity for the nine

months ended March 31, 2021:

In addition, the Company received

notices to exercise 1,580,140 warrants on a cashless basis resulting in issuance of 1,296,075 shares of common stock.

The following table summarizes the stock warrant

activity for the six months ended June 30, 2021:

Schedule of warrants activity

Weighted-Average Exercise Price Per Share

Outstanding, December 31, 2020

Outstanding, March 31, 2021

( 1,731,390 )

Outstanding, June 30, 2021

The following table discloses information regarding outstanding and

exercisable warrants at March 31, 2021:

exercisable warrants at June 30, 2021:

Schedule of warrants by exercise price

Exercise Price

Number of Option/Warrant Shares

Number of Warrant Shares

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Number of Option Shares

Number of Warrant Shares

Weighted Average Exercise Price

As of March 31, 2021 the aggregate intrinsic value of warrants vested

As of June 30, 2021, the aggregate intrinsic value of warrants vested

and outstanding was $ 1,205,768 .

Note 4 –

Commitments and Contingencies

Note 4 – Commitments and Contingencies

Executive Employment Agreements

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Pursuant to the Amendment, the severance benefits shall be twelve months

Climaco’s base salary.

Such severance payment shall be made in a single lump sum sixty days following the termination, provided

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On February 6, 2021, the compensation committee of the board of directors set Mr.

Climaco’s 2021 annual base salary

to $ 525,000 .

On June 28, 2019, we entered into employment letters with Drs.

7 unchanged sentences

On September 14, 2019, the Company, entered into an employment agreement

with Christopher Downs to serve as its Chief Financial Officer commencing on the closing date of the Company’s IPO, which occurred

on November 13, 2019.

5 unchanged sentences

On February 6, 2021, the compensation committee of the board of directors set Mr.

2021 annual base salary

Downs’ 2021 annual base salary

to $ 340,000 .

WP744 Portfolio (Berubicin)

1 unchanged sentence

Asset Purchase Agreement with Reata Pharmaceuticals, Inc.

(“Reata”).

Through this agreement, the Company purchased all of

Reata’s rights, title, interest and previously conducted research and development results in the chemical compound commonly known

as Berubicin.

In exchange for these rights, the Company agreed to pay Reata an amount equal to 2.25% of the net sales of Berubicin for

a period of 10 years from the Company’s first commercial sale of Berubicin plus $10,000.

Reata also agreed to collaborate with the

2 unchanged sentences

and Development Agreement with Houston Pharmaceuticals, Inc.

(“HPI”).

HPI is affiliated with Dr.

9 unchanged sentences

and (iii) $200,000 upon the approval by the FDA of a New Drug Application for any product utilizing WP744;

a series of quarterly development payments totaling $750,000 beginning immediately after the Company’s raise of $7,000,000 of investment

In addition, the Company issued 200,000 shares of the Company’s common stock valued at $0.045 per share to HPI upon execution

a series of quarterly development payments totaling $750,000 beginning immediately after the Company’s raise of $7,000,000 of investment

In addition, the Company issued 200,000 shares of the Company’s common stock valued at $0.045 per share to HPI upon execution

of the agreement.

Our rights pursuant to the HPI License are contingent on us raising at least $7.0 million within 12 months from the

effective date of the HPI License, a date which was extended by an additional 12 months by the payment of $40,000.

On November 13, 2019,

the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the HPI agreement.

to this agreement, the Company purchased $385,000 of pharmaceutical products from HPI for the manufacturing of Berubicin API.

the three months ended March 31, 2021 and 2020, the Company recognized $87,500 and $50,000, respectively related to this agreement.

The Company’s rights pursuant to the HPI License were contingent on us raising at least $7.0 million within 12

months from the effective date of the HPI License, a date which was extended by an additional 12 months by the payment of $40,000.

November 13, 2019, the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the

HPI agreement.

Unrelated to this agreement, the Company purchased $385,000 of pharmaceutical products from HPI for the manufacturing of

Berubicin API in a related party transaction reviewed and approved by the Company’s audit committee.

During the six months

ended June 30, 2021 and 2020, the Company recognized $ 175,000 and $ 100,000 , respectively related to this agreement.

On August 30, 2018, we entered into a sublicense agreement with WPD

Pharmaceuticals, Inc.

(“WPD”).

Pursuant to the agreement, the Company granted WPD an exclusive sublicense, even as to us,

21 unchanged sentences

performed by WPD's subcontractor, and (iii) a final payment of $262,145 upon Clinical Trial Application acceptance by the relevant regulatory

As of March 31, 2021, the upfront payment of $131,073 plus pass through costs of $1,575 are recorded in other receivable -

related party.

As of June 30, 2021, the upfront payment of $ 131,073 plus pass through costs of $ 1,575 are recorded in other receivable - related

On August 31, 2018, the Company entered into a sublicense agreement

with Animal Life Sciences, LLC (“ALI”), a related party, pursuant to which we granted ALI an exclusive sublicense, even as

to us, for the patent rights we licensed pursuant to the HPI License solely for the treatment of cancer in non-human animals through any

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On January 10, 2020, Company entered into a Patent and Technology License

Agreement (“Agreement”) with The Board of Regents of The University of Texas System, an agency of the State of Texas, on behalf

of The University of Texas M.

Anderson Cancer Center (“UTMDACC”).

Pursuant to the Agreement, the Company obtained a royalty-bearing,

worldwide, exclusive license to certain intellectual property rights, including patent rights, related to the Company’s recently

announced WP1244 drug technology.

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The commercial diligence milestones are as follows (i) initiated PC toxicology to support

filing of Investigational New Drug Application (“IND”) or New Drug Application (“NDA”) for the Licensed Product

within the eighteen (18) month period following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period

following the Effective Date and (iii) Commencement of Phase I Study within the five (5) year period following the Effective Date.

the three months ended March 31, 2021, the Company paid $22,902 to UTMDACC related to this agreement.

the six months ended June 30, 2021, the Company paid $ 22,902 to UTMDACC related to this agreement.

On May 7, 2020, pursuant to the WP1244 Portfolio license agreement

3 unchanged sentences

The Company recorded $ 734,000

in 2020 related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.

The remainder will be paid and recorded in 2021.

in 2020 related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.

remainder will be paid and recorded in 2021.

The principal investigator for this agreement is Dr.

Waldemar Priebe, who controls a

majority of the Company’s share.

During the three months ended March 31, 2021, the Company paid $200,000 and accrued an additional

Waldemar Priebe, who controls a majority

of the Company’s share.

During the six months ended June 30, 2021, the Company paid $ 200,000 and accrued an additional $400,000

to UTMDACC related to this agreement.

As of March 31, 2021, the Company has accrued $400,000 in research and development expenses

As of June 30, 2021, the Company has accrued $ 600,000 in research and development expenses to UTMDACC.

Anti-Viral Portfolio

On March 20, 2020, the Company entered into a Development Agreement

(“Agreement”) with WPD Pharmaceuticals (“WPD”), a company founded by Dr.

Waldemar Priebe, the founder and largest

18 unchanged sentences

the products.

During the six months ended June 30, 2020, the Company paid $ 225,000 related to this agreement.

Note 5 – Subsequent Events

On July 15, 2021, our compensation committee recommended to our Board

and our Board approved the following policy for compensating non-employee members of the Board.

Each independent director shall receive

annual cash compensation of $40,000.

In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance

Committee shall receive an annual compensation of $12,000, $7,700 and $5,500, respectively;

the other members of such committees shall

receive an annual compensation of $5,500, $4,000 and $3,500, respectively;

and the lead independent director shall receive annual compensation

In addition, the Board approved the issuance to each independent director of options to purchase 32,000 shares of the Company’s

common stock vesting on the earlier of the one-year anniversary of the date of the grant or the date of the 2022 annual meeting.

options have a 10-year term and an exercise equal to the closing price of the common stock on the date of the grant of $1.80.

On July 24, 2021, the Company received Fast Track Designation from

the FDA for Berubicin.

Fast Track Designation is designed to facilitate the development and expedite the review of drugs to treat

serious conditions and fill an unmet medical need.

In July 2021, the Company issued 75,000

shares of common stock for investor relations services for a four-month period ending September 2021.

The fair value of the shares

on the commitment date was $140,250.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements